FTD Companies Inc. and Liberty Interactive Corp. have executed a definitive agreement under which FTD will acquire Liberty's Provide Commerce floral and gifting businesses. Provide Commerce is headquartered in San Diego.
Under the terms of the $430 million transaction, Liberty will receive 10.2 million shares of FTD common stock, representing 35 percent of the combined company and $121 million in cash. FTD (Nasdaq: FTD) and Liberty (Nasdaq: LINTA) expect to complete the transaction by the end of 2014.
Provide Commerce operates consumer gifting e-commerce brands that include ProFlowers, Shari's Berries and Personal Creations. FTD and Provide Commerce each have reported $600 million in annual revenues.
Under the terms of the transaction, Provide Commerce will become a wholly-owned subsidiary of FTD. The transaction is valued at $430 million, comprising 10.2 million shares of FTD common stock, valued at $309 million, based on the volume weighted average price of FTD's shares for the 10-day period ended July 28, and $121 million in cash. Upon closing, FTD will have approximately 29.2 million shares outstanding (based on FTD shares outstanding as of July 29, 2014) and Liberty will own approximately 35 percent of FTD shares outstanding.
Under the terms of the transaction agreement, Provide Commerce's RedEnvelope business will be excluded from the transaction and retained by Liberty.
The transaction is expected to close by the end of 2014, subject to customary closing conditions including approval by regulators and FTD's stockholders. FTD has secured financing commitments from Bank of America Merrill Lynch and Wells Fargo Bank, N.A. for this transaction.
Upon closing of the transaction, FTD's management team will remain in place with Robert S. Apatoff continuing as president and CEO. Robert Berglass will continue as chairman of the board of FTD. FTD will expand its board of directors from seven to 11 directors with Liberty selecting four new directors for appointment to the board.
While the transaction is being completed, FTD and Provide Commerce expect no change in their independent, existing operations, including customer service and product availability. Upon closing of the transaction, there will be no immediate changes to the operations of Provide Commerce's e-commerce brands.
Moelis & Company is serving as financial adviser to FTD and Jones Day is acting as legal counsel. Baker Botts LLP and Cooley LLP are acting as legal counsel for Liberty and Provide Commerce, respectively.